Biofuels won't solve world energy problem: Shell

Alex Lawler, Reuters 20 Apr 08;

ROME (Reuters) - Biofuels will not solve the world's energy problem, the chief executive of Royal Dutch Shell said on Sunday, amid growing criticism of their environmental and social benefits.

The remarks follow protests in Brazil and Europe against fuels derived from food crops. Food shortages and rising costs have set off rioting and protests in countries including Haiti, Cameroon, Niger and Indonesia.

"The essential point of biofuels is over time they will play a role," Jeroen van der Veer, chief executive of Royal Dutch Shell, told reporters on the sidelines of the International Energy Forum. "But there are high expectations what role they will play in the short term."

The oil minister for Qatar, a member of the Organization of the Petroleum Exporting Countries, had harsher words to say about biofuels at the energy forum, a gathering of producers and consumers.

"Now the world is facing a shortage of food," Qatar's Abdullah al-Attiyah said, answering a question at a news conference.

"I don't think we should blame oil, we should blame biofuels."

UNINTENDED CONSEQUENCES

Biofuels are set to play a growing role. The European Union agreed last year to get 10 percent of all transport fuel from biofuels by 2020 to help fight climate change.

But concern over meeting the biofuels targets has fuelled fears that sky-high food prices may rise even further if fertile arable land in Europe is turned over to growing "energy crops".

First-generation biofuels usually come from food crops such as wheat, maize, sugar or vegetable oils. They need energy-intensive inputs like fertilizer, which make it harder to cut emissions contributing to climate change.

Second-generation biofuels would use non-food products such as straw and waste lumber. So far, their production has been mostly experimental.

"Biofuels are all about how you develop them without unintended consequences. It is not only the competition with food, it is also the competition for sweet water in the world," Shell's Van der Veer said.

An official from the International Energy Agency also said the impact of biofuels should have been forseen.

"Maybe we should have anticipated them better," the IEA's deputy executive director, William Ramsay, said.

"But when you have a combination of things happening at the same time -- increasing demand for energy-intensive food, terrific droughts, things like that -- then add to that the competition in certain markets for food and fuel, the preconditions are there."

(Additional reporting by Simon Webb)

Growing world needs every form of energy: Shell
Reuters 20 Apr 08;

ROME (Reuters) - The world will need every form of energy available -- from coal to biofuels -- to keep pace with a booming population, the chief executive of Royal Dutch Shell said on Sunday.

Jeroen van der Veer also said record oil prices, which hit $117 a barrel on Friday, had yet to curb the thirst for fuel.

"... Despite high prices, demand is not dropping, there is only slower growth. Easy oil and easy gas cannot supply all that surge in demand," he told reporters on the sidelines of the International Energy Forum.

"So it is not a matter of choice, do we do coal, or oil, or nuclear? The world will need everything, including biofuels. You name it."

Costly oil is starting to erode some demand in top energy consumer the United States, where the price of gasoline has shot beyond $3 a gallon.

But so far, consumers in emerging economies such as India and China have been shielded by subsidized fuel prices.

"We had expected maybe a bit more elasticity with the oil price (and demand). But it may come with a delay," said van der Veer.

"Because certain countries, that are pretty large have subsidies -- like India, like China. So you are still to have a reaction."